Friday, August 05, 2011

Social Tensions Near Boiling Point In Chile

Copper mining is a huge part of the Chilean economy

It is a year to the day since thirty-three miners became trapped down a notoriously dangerous privatised mine in Copiapo, Chile, when a gas explosion produced a massive collapse. They were finally freed after seventy days underground, provoking joyous celebration around the globe. Twelve months on, they remain mired in poverty, while their brother miners in Chile's biggest mine fight for livable levels of pay, and thousands of students fight for cheaper and better state education.

As a Washington Post article noted this week, "They have an exhibit at the Smithsonian and a line of toys depicting their epic rescue. But most of the 33 men whose saga in a collapsed mine captivated the world a year ago face a new crisis today: poverty."

Suffering from poor mental and physical health, the escapees have struggled to find employment outside the mining industry many had spent their working lives in. Some make a little money giving talks here and there, others focus on legal action against the government and mine owners. But their plight is symbolic of a wider social crisis in the country.

Workers' conditions have barely improved since the western-backed dictatorship of Augusto Pinochet, who overthrow the left nationalist president Salvador Allende in a CIA-inspired coup d'etat. Current president Sebastián Piñera has an estimated net worth of US$2.4bn, and his party has historical links to the Pinochet era. Unemployment is relatively low at around 7%, but those in work are paid extremely badly, particularly in the highly profitable mining sector.

The super-exploited workers who mine at the Escondida colliery in the north of the country shift about a fifth of a tonne of copper each per day, which is worth about US$780. In return, they make barely enough to make ends meet, plus meagre productivity bonuses, worth US$193 per year. On 21st July, the contracted staff walked out, demanding windfall bonuses of US$10,000. They were joined by subcontractors, who are even worse paid, and demanded 30% of whatever the contracted employees got.

The miners' FM union initially limited the strike to one day, but gave way when a cafe strike meeting ended in miners chanting ‘¡A morir!’ ('till death!').

BHP Billiton - the mine's largest owners - could easily have absorbed the miners' demands, which amount to just one day's production. However, the Chilean ruling class feared the impact of a major victory for the strikers, and pressed both the company and the union to reach a deal.

Colin Becker, mining analyst at PriceWaterHouseCoopers in the capital Santiago, warned of an “extremely dangerous precedent” if the strike was victorious. “Escondida is the biggest mine in Chile,” Becker said, “so it’s also a benchmark.” Given victory for the strikers, “You could see this spreading to other mines.” He argued that the mine owners should not “negotiate over every whim; they must break the cycle.”

A burning barricade in Santiago yesterday

Last Friday, FM announced a sell-out deal with the owners, but it was rejected by a 96% margin. Today, FM returned with a similar offer, but wearied and financially-pressed strikers reluctantly agreed to accept it. They are now expected to receive a one-off US$5,760 bonus payment, but of course this has been eaten into by two weeks of unpaid wages. By refusing to call out other miners or make an appeal to the wider working class, FM has successfully strangled the strike.

But despite the best intentions of the financiers and the unions, other miners have been coming out over the last few weeks. Workers at the Collahuasi private mine struck for twenty-four hours last weekend, in response to anti-union bullying since the end of a month-long strike last December. Last month, there was also a one day nationwide stoppage at the state-run Codelco, amid speculation that a planned restructuring could lead to lay-offs and worsened compensation.

Chilean students have also been demonstrating this week, calling for cheaper and better education. Rebelling against a government ban, thousands of young people took to the streets banging pots and pans in a 'cacerolazo' - a form of protest popular in certain Spanish-speaking countries, and most famously brought to the world's attention in the Argentine rebellion of 2001-02. When the Chileans were violently confronted by the police, many fought back, and they blocked roads and lit fires in response to water cannon and tear gas attacks.

Yesterday, a poll showed that Pinera is the least popular president since Pinochet's dictatorship, with just 26% of Chileans approving of his performance. The social tensions underlying the recent upsurge have not gone away, and will erupt in other directions before too much time has passed.